Everyone Wins: New Long-Term Power Purchase Agreements See Centralia Plant Units to the End of Their Lives

---

Researched by Industrial Info Resources (Sugar Land, Texas)--TransAlta (NYSE:TAC) (Calgary, Alberta), Canada's largest investor-owned energy generator, signed a long-term power purchase agreement (PPA) with Puget Sound Energy (Bellevue, Washington) that will see units 1 and 2 at the Centralia plant through to the end of their lives. TransAlta beat out more than 30 competing alternative supply sources in Puget Sound Energy's recent request for proposal (RFP). Units 1 and 2 are scheduled for shutdown in 2020 and 2025, respectively, based on an agreement signed into law by Washington Governor Chris Gregoire in 2011. The agreement was between TransAlta, legislators, labor and environmental activists, and is part of Washington state's efforts to reduce carbon emissions. Units 1 and 2 are the oldest at the plant (coming online in the 1970s), and the 1,340-megawatt (MW) Centralia facility houses the state's only coal-fired power plant.

Industrial Info is tracking 225 coal power units, totaling 49,964 MW, with shutdown dates between July 2012 and the end of 2025.

Click on the image at the right to see a graph detailing the coal power unit shutdowns by region and megawatts.

"I'm delighted that TransAlta and Puget Sound Energy came together to help advance the state's goal of replacing coal-fired power," Governor Chris Gregoire said. "This will help our state move toward more environmentally sustainable energy."

The new PPA runs from December 2014 to December 2025 and will see TransAlta supplying Puget Sound Energy with 180 MW of electricity in the first year, 280 MW in the second year, 380 MW per year from 2016 to 2024, and 300 MW in the final year. The PPA does not cover all of Puget Sound Energy's power supply needs for the coming years, and it is likely that there will be another RFP next year.

"This agreement with Puget Sound Energy provides customers with a stable-priced, low-cost source of power, while advancing TransAlta's goal of contracting the output of the facility," TransAlta USA President Paul Taylor said.

The PPA, like the 2011 agreement to shut down units 1 and 2, has received a positive reaction from environmental activists. "We applaud Puget Sound Energy for working with TransAlta to transition Washington State off of coal, and in the process assist Lewis County and the workers to make the transition onto clean energy," said Bruce Nilles, Senior Director of the Sierra Club's Beyond Coal Campaign.

For more information see July 20, 2012, article - U.S. Coal Majors Invest in Coal Export Network as Overseas Growth Markets Beckon, and July 27, 2012, article - U.S. Could Reduce CO2 Emissions to 1990 Levels in 2012, as Gas and Renewables Make Their Mark.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.